FCC Chairman Proposes Major Changes To Phone Subsidy Plan

In a speech at the FCC today, October 6, 2011, Chairman Julius Genachowski outlined the Commission's plans to restructure the Universal Service Fund, which provides subsidies for phone service in rural high-cost areas. At the same time, the Communications Workers of America urged the Commission to ensure that these changes include strict protections for both consumers and workers.

Genachowski's speech was short on specifics, but promised that the newly renamed Connect America Fund "would ultimately help get broadband to the 18 million Americans who can't get it today," and that the Intercarrier Compensation system (ICC) would be changed to eliminate "billions of dollars in hidden subsidies that are currently built in to wireless and long-distance bills." In addition, the Commission will establish a Mobility Fund to support 4G wireless build-out.

CWA is strongly in favor of bringing all Americans access to high-speed broadband and agrees with Chairman Genachowski that, "Broadband has gone from being a luxury to a necessity." To ensure that service isn't compromised and that carriers that receive subsidies are subject to full accountability, CWA urges the FCC guarantee that:
 
*    Existing local carriers have the right-of-first refusal to accept or decline baseline support, followed by a competitive bidding process.
*    They adopt rules which minimize "the risks of stranded investment and stranded customers, while facilitating upgrading wired networks."
*    Maintain carrier-of-last-resort obligations.
*    Maintain high standards of service quality and data reporting.
*    Continue to provide operator services and directory assistance
*    Connect all schools, libraries, and other community anchor institutions.
*    Ensure an adequate transitional recovery mechanism as access charges are reduced.

And above all, "Require stringent compliance with all labor laws and respect for workers' rights" by all recipients of USF support.

The FCC is scheduled to vote on the universal service reform plan on Oct. 27.

FCC Chairman Julius Genachowski speech (October 6, 2011)

Ex Parte Notice. In the Matter of Connect America Fund (October 4, 2011)